Barlany Car Hire Services Limited-v-corporate Insurance Limited

CASE DETAILS

Case No: HCCC (Milimani) No. 1249 of 2000 (Unreported)

Forum: High Court of Kenya at Milimani, Nairobi.

Judge: P.J.S. Hewett

Date: 12^th October, 2000

Authorities cited in the Ruling

1. H. Ford & Co. Limited-v-Compagnie Furness (France) 1922 2 KB 797

2. Halsbury Laws of England 4^th Edition, Vol. 2 Para. 515

3. Section 4 of the Limitation of action Act

CASE NOTES

In this case, an application for stay pending reference to arbitration was accompanied by a request that filing of the Defence be stayed pending the determination by the court on a preliminary point of law . The preliminary point was whether the Plaintiff was disentitled to any claim having failed to refer its claim to arbitration within 12 months of the Defendant's disclaimer of liability.

The arbitration agreement provided that if the Defendant company disclaimed liability to the insured for any claim, such claim be referred to arbitration within 12 calendar months from the date of the disclaimer. The Plaintiff failed to properly institute the arbitration process and more than 12 months lapsed. The defendant therefore was of the view that the Plaintiff was now too late to arbitrate and indeed even too late to claim at all.

The court held that the Plaintiff was, indeed, too late to appoint an arbitrator or claim there having been no reference to arbitration within 12 months of the repudiation. The court agreed with the Defendant that the clause imposing the contractual deadline was a condition precedent to a valid claim as was held in the case of H. Ford & Co. Limited-v-Compagnie Furness (France) 1922 2 KB 797 where a clause to similar effect was upheld.

The court quoted the following holding in the H. Ford case (supra) with approval:

"Therefore as the jurisdiction of the arbitrator was only given to him by the consent of the parties and the parties agreed that the arbitrator if appointed at all should be appointed within a certain time, it seems to me to follow that as that time has elapsed, neither party had power to appoint an arbitrator unless the other party consented." (at page 810)

The court also upheld the Defendant's argument that there was no longer any cause of action available to the Plaintiff as the the matter was time barred. The court noted that no application had been made to extend the limitation period, if that were possible. The court upheld the following comments in 4^th Edition of Halsbury Vol. 2 Para. 515:

"The parties to an arbitration agreement may, if they wish, contract that no arbitration proceedings shall be brought after the expiration of some shorter period than that applicable under the statute."

The learned judge held that the above words answered the Plaintiff's suggestion that the matter was governed by section 4 of the Limitation of action Act. The court was of the view that the section of the Act merely gives a maximum time limit within which a suit may be brought and thus parties may agree to be limited to a shorter time.